Gap in insurer payments to Partners and competitors surprises Mass. health official

A new state report describing the Massachusetts health care market provides an interesting snapshot of where patients go for medical care and the cost. I hit on some highlights in Wednesday’s Globe, including the dominance of Partners HealthCare compared with other provider groups.

Here’s how the hospitals and doctors stacked up in 2011 and 2012.

Partners, which includes Massachusetts General and Brigham and Women’s hospitals, received 31 percent of all the money spent by private insurers last year for acute hospital care; Caregroup, led by Beth Israel Deaconess Medical Center, received 10 percent, the UMass Memorial health care system, 7 percent; and the Lahey and Steward systems, each 5 percent.

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Fourteen percent of hospital payments went to a variety of other systems, and 28 percent went to a range of independent hospitals.

So even though Beth Israel Deaconess and Steward have been aggressive in their efforts to add hospitals, the numbers show they still lag far behind Partners’ market power.

“What surprises me most is the difference between Partners and their next biggest competitor,’’ said Aron Boros, executive director of the Center for Health Information and Analysis, which compiled the report. He said Partners has been able to negotiate high prices with all insurers, unlike other systems. “None of them has the consistent success of Partners in driving prices up,’’ he said.

Partners spokesman Rich Copp pointed out in Wednesday’s story that Partners cares for about 1.5 million patients, a major reason for its high revenue. But Steward takes care of 1.2 million patients, spokesman Christopher Murphy told me Wednesday, and gets nowhere near the amount of health care dollars as Partners.

It’s unclear if they are counting patients the same way, but Partners generally charges higher prices than Steward, and operates two major academic medical centers with associated research and educational expenses, while Steward is primarily a chain of community hospitals.

The report said the insurance market also is highly concentrated, with Blue Cross Blue Shield, Harvard Pilgrim Health Care, and Tufts Health Plan covering 80 percent of the privately insured, though it did not address the impact.

Because medical spending grew slower than insurance premiums between 2009 and 2011, the plans retained growing amounts of revenue they did not spend on patient care—$1.17 billion in 2011, an increase of 20 percent over the prior year. Premiums grew 9.7 percent during that period while benefits covered by health plans shrank. What happens to all that extra money? That’s something Boros said his agency is examining closely.

“Some of it has been returned to members and employers in rebates and refunds,’’ said Eric Linzer, spokesman for the Massachusetts Association of Health Plans. A portion is used to implement new federal and state requirements to expand insurance coverage and control payments to providers, he said.